§ Mr. Higginsasked the Secretary of State for Transport if he will make a statement about support for British Rail passenger services and the external financing limit for the current year.
§ Mr. David HowellAs part of its effort to cut costs and eliminate spare capacity, British Rail has developed new schemes for reducing manpower. The reductions are expected to save over £60 million in a full year, but the redundancy costs will fall in the present financial year, largely before the savings begin to flow. No provision was 79W made for these costs when the board's external financing limit of £897 million for 1982–83 was set. To accommodate these transitional costs, the Government have decided to increase the board's external financing limit for 1982–83 to £930 million.
A substantial part of the scheme relates to the passenger business and will lead to savings in grant requirement in the future. In recognition of this, the Government have decided that the grant ceiling of £804 million for 1982 should be increased by the appropriate amount, £33 million, again purely to accommodate the transitional costs of the schemes. The necessary increase in provision is being sought in the winter supplementary estimates. The increase will be found from the Contingency Reserve and within existing planned expenditure totals.